The Secret’s Out about Plain Packaging

The WasteWatcher is the staff blog of Citizens Against Government Waste (CAGW) and the Council for Citizens Against Government Waste (CCAGW). For questions, contact blog@cagw.org.

September 10, 2014 - 15:59 — Deborah Collier

Award-winning author Madeleine L'Engle wrote in her 1968 novel, "The Young Unicorns,” that “[t]o take away a man's freedom of choice, even his freedom to make the wrong choice, is to manipulate him as though he were a puppet and not a person.”

Her comment aptly describes big-government policies that are intended to protect people from themselves by limiting their freedom of choice. One of the latest examples of such patent paternalism is plain packaging.

The global economy has created the opportunity for many brand name and trademarked products to become well-known across international boundaries, including automobiles, clothing, household cleaners, fast food chains, liquor, shoes, and tobacco. Companies spend hundreds of millions of dollars building up their image and marketing their products; their copyrights, trademarks, and patents help protect their intellectual property (IP) from being stolen or misused.

When products become widely successful and well-recognized, consumers begin to trust the products and seek out them out because they look familiar. The products span language barriers and lifestyles. While plain packaging is not precisely theft of IP, it clearly impinges upon the ability of the product’s owner to obtain the full economic benefit of the value of their brand because it has a diminished presence on the label.

The value of individual branding can be seen in the reverse side of the equation, when protestors in other countries attack symbols and facilities of U.S.-based companies to object to certain policies or practices. In such cases, the company more or less is the country.

In other words, branded products that are sold around the world have substantial value because they can be recognized by the name on the packaging or storefront. That is one of the many reasons why efforts to require plain packaging for the products of a single industry are so pernicious.

Some governments have decided that certain legal products should be covered with a plain wrapper and not bear a brand name, resulting in fewer of these items being purchased by consumers. For example, it is not sufficient that tobacco products already bear warning labels about the risk of cancer and other diseases; Australia now requires that all such products have a label that contains sickening photos of rotted body parts riddled with cancer and prepped for surgery, accompanied by the bold phrases such as “Smoking Causes Cancer,” or “Smoking Causes Blindness.” The package colors are the same for all brands and therefore become difficult to distinguish. For example, Marlboro Red, which normally has a distinctive red and white label with the Phillip Morris logo, is sold in Australia in a solid green package with large pictures of body parts and just the words “Marlboro Red.”

A study conducted by the Australian Institute of Health and Welfare (AIHW) from 2010 to 2013 claimed that as a result of plain packaging, the smoking rate in Australia declined by more than two percent. Yet, during those years, the Australian government increased tax on cigarettes by 12.5 percent, raising questions about the study’s data. During a July 17, 2014 interview, AIHW Senior Executive Geoff Neideck said it would be a stretch to claim the use of plain packaging played “a key factor” in cutting the smoking rate.

Other countries have also begun imposing plain packaging rules on various products. The New Zealand parliament has hinted that it plans to institute plain packaging with graphic warnings on alcoholic beverages sometime this year, while India, France, South Africa, and the United Kingdom are considering tougher packaging laws for tobacco products by 2015.

One wonders which legitimate industry will be next. For example, Indonesia’s former Director General for International Trade Co-operation Gita Wirjawan sent a letter to New Zealand's Ministry of Health, stating, "If the cigarettes we export there [New Zealand] are not allowed to have brands, then the wine they sell here [in Indonesia] shouldn't also."

Not only does plain packaging create a disadvantage to consumers wishing to purchase specific brands based on familiarity, quality, or brand loyalty, it also increases the risk of counterfeit or fake products entering the marketplace by allowing bootleggers to easily copy plain packaging in an effort to sell the same products for a cheaper price.

This threat of counterfeit or fake goods entering the marketplace places consumers at increased risk. For example, bootlegged cigarettes can contain caustic or toxic chemicals, including high levels arsenic, due to fewer controls over manufacturing.

Following the implementation of plain packaging rules in Australia, counterfeiting and smuggling of illicit cigarettes increased by 40 percent, and seizures of illicit cigarettes increased by 143 percent, from 82 million in 2012 to 200 million in 2013.

Imagine the concept of plain packaging spilling out into every product that a bureaucrat finds objectionable: trucks and SUVs; fatty or salty foods; beer, wine, and liquor; and even certain types of clothing. The government is already far too involved in everyone’s life; such additional overprotection is completely unnecessary.

Some industries are fighting back. In 2012, Mars, Inc., the American global confectionery and food manufacturer and the third largest privately held company in the U.S., wrote to the British government voicing its concern over the imposition of plain packaging on the tobacco industry and what it could mean for the future of the food and beverage industries. The legal watchdogs at Mars have good reason to be concerned about government bureaucrats increasingly trying to impose restrictions on products or services they deem harmful by their own standards to others.

Efforts to limit freedom of choice extend beyond plain packaging. For example, on May 31, 2012, the New York City Health Department, at the urging of Mayor Michael Bloomberg, proposed a ban on the sale of large-sized carbonated beverages, sports drinks, sweetened tea or coffee, and other sugary beverages as an antidote to the rising obesity problem. On June 26, 2014, the New York State Court of Appeals ruled that the Health Department had “exceeded the scope of its regulatory authority.”

According to the Center for Consumer Freedom, state legislatures in California, Colorado, the District of Columbia, Maine, Ohio, and Washington State have implemented or considered taxes on certain foods and beverages. Maine imposed a 5.5 percent snack tax on chips, soft drinks, cookies, and ice cream from 1991 until 2000. In 2008, Maine citizens voted to permanently ban a 42 percent tax on soft drinks, and in 2010, Washington State’s snack tax was also repealed by voter initiative.

Numerous studies from research institutions across the country have all reached similar conclusions regarding efforts to limit freedom of choice through plain packaging and snack taxes: they are ineffective. Studies conducted in 2010 from both the Robert Wood Johnson Foundation and the Cato Institute, found that snack taxes were unlikely to change either the nation’s obesity rate or the amount of consumption of the taxed products. Blaming a nation’s health woes on one type of product is both overly simplistic and discriminatory.

Plain packaging acts as a thief in the night, slowly picking and choosing its targets before wreaking havoc. Once inside, it steals identities, creates a false sense of security, and increasingly diminishes its victim’s identities. Under the guise of looking out for its citizenry, the ‘nanny state’ dictates and babysits the choices of people that are believed to be incapable of making the “right” decisions by choosing for themselves; that is the scariest secret of all.